Ahead of this year’s InternetRetailing Conference 2016, we’re previewing some of the key events of the conference, profiling the conference streams and interviewing speakers. This week we speak to James McClure of Airbnb.
Internet Retailing: How do you see the changes that marketplaces have brought so far to the way we sell online, and how do you see that developing in years to come?
James McClure, general manager, UK & Ireland, Airbnb: Marketplaces, much as the original markets would have done through history, have brought individuals into business. Online marketplaces, whether eBay in the earlier days or taking a financial approach with Kickstarter or a travel approach with Airbnb, have allowed regular people to be suppliers and providers of goods and services, as well as consumers.
I think that’s what has brought a different approach to both how we sell and how we think about buying. What’s allowed that to happen is the increasing ability to have a currency of trust online, so how you can feel the thing you’re buying is either going to get delivered to you and be of the quality you expect. This is based on a mix of things which have only come about through the advent of things like social media, with verifications. Airbnb is an example of how reviews are used – you can only leave a review after someone stayed. About 75% of all the stays we have get reviewed.
That gives you the credibility and trust to be able to understand both who you might be welcoming into your home, or the person that you are booking the stay with. With the ability to have profiles, you learn a bit more about the individuals and the brands or people behind the buyer and seller. You can have a greater understanding of not just whether you will be safe, but whether you will enjoy this product or experience. With Airbnb, if you think of the style of trip or holiday you’re looking to have, you can choose different places with different hosts that will fulfil that, based on shared interests.
IR: How do you see marketplaces continuing to develop in the future?
JMC: A big area of development for marketplaces will be about concentrating on the matching of buyer and seller, in whatever aspect. The challenge of marketplaces as they continue to grow is how do you find what you want in a straightforward fashion? If you think of the wider consumer trends of things being more mobile, more immediate and using the power of social recommendations, there will be a natural evolution in the ability for marketplaces to help to do that matching in a much more efficient and clear way.
It will become more mainstream for individuals and regular people to be suppliers, to use that broad term, on marketplaces. There are well over 100,000 Airbnb places to stay in the UK. More than nine out of 10 of those are people who are sharing their primary residence, where they live. We all go on holiday and there’s all the time when our home is probably not being used. Your house is sitting there not doing anything when you’re on holiday for a couple of weeks in the summer, and that is a time when someone might want to come to the UK. That is a trend that we’ll see more individual participation, particularly on the supplier side of marketplaces. I’m sure that people in businesses like Etsy, etc, would see the same developments.
IR: Tell us about a big challenge that this type of disruption might bring?
JMC: I think the wider challenge that marketplaces have thrown up is around what can or should you trust online? How can you feel confident of having a five star experience? Broadly, large players have taken a strong approach to that. If I take us as an example, we have verified ID so everyone who is using either as a guest or a host (a buyer or a seller) have to upload a copy of either their driving licence of their passport. There’s a profile set up, there are reviews set up for which you have to have stayed somewhere. We also understand where the challenges are.
We have hundreds of people in our trust and safety team who work in different locations around the world so we have 24/7 coverage to be able to understand any particular challenges and hopefully head them off. Large marketplaces are doing a lot of work both behind the scenes to ensure you have that confidence in being able to buy through a marketplace. It’s also about having the confidence if you’re a provider to have that backup. For our hosts we provide both a guarantee against any damage of up to $1m, and we provide liability insurance so if someone was to slip in the shower and break their leg they are covered for up to $1m there.
This is about removing any removing the barriers as to why people wouldn’t engage in marketplaces if they haven’t before. It’s a real area of being able to democratise the access to both goods and services you might not have been able to get at decent availability or price. If you take an almost trivial example, there are regional markets for sharing power tools. The amount of times people actually use their Black & Decker drill is really not that much time. It’s not an everyday thing. Using the internet to connect people in a similar area with the ability to lend their tools for a fee, works very well and removes the barriers to be able to do a lot of things that would have been more difficult before.
It’s more efficient, using unused capacity. Taking the example of if I were to go on holiday, my place in London is just sitting there not doing anything. It’s a better use of London space to have some tourists staying in my place for a week.
IR: Looking to the longer term, what’s your vision of how we are going to be shopping, whether for goods or services, in five to 10 years time?
JMC: I think on the services side there are potentially larger disruptions still to come. Many services are still bought by the hour. If you think about solicitors, builders or decorators, there is a lot of really rich information to help people make their decisions about which services they look to get. A lot of that is very informal and done through personal networks rather than that broad connecting of people through the internet. Similarly there’s less accountability and transparency in the reviews that many services providers will have done in the past.
I think there’s a lot of opportunity for more marketplace-style operations to come to help drive a lot of that democratisation and efficiency in the services sector. If I think of the goods sector, over the next five to 10 years connectivity and people’s connectedness is only going to increase, whether that’s improvements in moving onto 5G in terms of mobile network, or ubiquitous mobile broadband, and the amount of devices that will be connected to each other.
The nature of how your profile will be connected across those things will be absolutely paramount. It’s connected across those different devices, taking those signals. It’s about the importance of the platform, of information that I have run out of milk or nappies, and how that can be understood and both technically delivered but also delivered in terms of payment in a way which is the most straightforward and convenient for the end user.
But then in a world where things are more brought together and connected, and given the importance of where people choose to spend their time and which companies or brands that they actually gravitate towards, then the authenticity and what you represent becomes really important. It’s about how you can actually involve the people who are your biggest fans and advocates. At Airbnb we have our community of hosts. There’s more than 2.5m places to stay around the world – how can we involve our hosts to continue to be the actual physical manifestation of the Airbnb brand, being able to live like a local and belong anywhere?
Our communications are the face of Airbnb and we’ve done marketing campaigns where the hosts are at the heart of what we do. In November we have a large conference for our hosts – we’re bringing 5,000 people from around the world to LA for an event with a mix of guest speakers, and product announcements. It’s really geared around how we can provide great parity and be better partners to the places in which we live. One of the ways to drive that authenticity and what your brand can provide is actually through engaging people that use it and know it the best. That’s something that would be more widespread as a strategy and tactic over the coming years.
IR: Apart from your own presentation what are you most looking forward to at IRC 2016?
JMC: In terms of speakers, I think Lego is in a very interesting period in time. It’s one of the most loved and iconic brands that there is around the world, and is successful in providing high quality things that people love. But then as a retail distributor, it’s about the mix of your own online store and how you work with external partners. Then there are other arms to the Lego business, from licensing to movie production to doing co-marketing with Star Wars, as well as the theme parks. It’s all about how you look to draw that stuff together as a true omnichannel network. That should be a fascinating session.
James McClure of Airbnb, will be a keynote speaker at IRC 2016. His presentation, New horizons for marketplaces, is at 9.10am at the event, to be held at the Novotel Hammersmith on October 12. Click here too to find out more about the InternetRetailing Conference and sister event eDelivery Conference held on October 11, and about how to buy tickets for the events.
We have a limited number of full delegate passes to win. Each entitles the holder to access all conference tracks, post conference networking receptions, and to meals and refreshments at the event. We’re offering them to the retailers who we judge to have the best answer to the following question: what is the key ecommerce/multichannel event of the year so far, in your view? Enter by tweeting @IR_conf and @etail with your responses.